Re-Building Your Company in Tough Times:
A Series of Articles

Collier Building Industry Association
Articles for “Business Builder” newsletter
Published Summer 2007
by John A. Haas, Ph.D.
Management Strategies Group

III: Introducing Change:
Getting People on Board

The third in a series of articles

We keep hearing that “the only thing that’s constant is that things will change.” Often, these changes are driven by competitive forces, economic conditions or improvements in available technology for producing or delivering our products or services, or in managing our business. These concepts apply whether your organization has 10 or 200 employees.

In reading this article, please consider a change to your organization that you have made recently or may be thinking of making. Examples could include:

• Introducing a new project management or estimating system or tool
• Introducing new software linking estimating to purchasing, inventory control, billing and financial reporting
• Adding a commercial construction division to your residential construction business
• Closing down part of your business, such as no longer pouring concrete for building foundations or eliminating your finish carpentry operation.
• Downsizing your operation, where fewer employees will be given added responsibilities and be expected to handle basically the workload as when you had more employees.
• Acquiring or merging with another company

Expect Resistance

Resistance to change is natural, especially when your company has been successful doing things a certain way. We become comfortable with behavior we’re used to and that has served us well in the past, and therefore we are reluctant to change it.

By definition, change involves incurring some risk, as we try and continually fine-tune new behaviors. Yet, we realize that things that have worked well for us up to now are no longer working the same ways and having the same positive impact on our business. It reminds me of one great definition of insanity: doing the same things we’ve always done but expecting different outcomes. But, in tough times, we need to step back, assess our business model, structure and management processes, and determine how to get back on track. Whether that means reducing staff, shuffling roles, creating more formal performance goals or revamping our marketing efforts, it all adds up to finding ways to “shake up our world” and getting people re-focused and re-energized so we can again move forward. This means moving out of our “comfort zones.”

Why Change Attempts Fail

When a company announces changes in its operation, those changes are often well thought out. The changes are often logical, strategic, complete and introduced through a well-planned process. Yet, they often fail, mostly due to:

• Paying inadequate attention to the people dimension. Change is hard for everyone—harder for some than others.
• Lack of a sound “change management” strategy
• Underestimating what it takes for a change to take hold. It’s not a linear or efficient process. It involves people who need to change their behavior in some ways, and that takes time and effort.

Some Principles in Introducing Change

In deciding on a change, you’ve concluded that the benefits of change coupled with dissatisfaction with the current situation must outweigh the effort and hassle involved in changing.

In planning changes to the organization or operation, the leader should keep some fundamental principles in mind:

• Implementing changes requires and involves people
• Process changes are predictable, reliable and rational; people are not
• Organizations are systems. Changes in one area have ripple effects in others, impacting various elements and people in various ways
• People naturally resist change—even positive change.

William Bridges developed the following model, thoroughly described and discussed in his book “Managing Transitions.”

Change Starts with the Ending: Getting People to Let Go

Knowing that people naturally resist change, introducing change requires that we recognize and acknowledge what we’re moving from. Some of the elements of this are:

• Identifying who is losing what. What procedures or processes will be changing for various people affected by the change?
• Expect overreaction from some people. For example: “How can I be expected to just start doing this a whole new way?” “Why are they fixing what isn’t broken?” “Who dreamed up this crazy idea?” “Here we go again. What’ll be next?”, etc.
• Acknowledge losses openly and sympathetically. Without apologizing for making the change, you can sympathize with how some people may feel about it. For example, “I know that switching to the new software will make a lot of you feel like beginners again. I feel that way myself, but we’ll get through it.”
• Expect some to show signs of “grieving.” When endings occur, some people get angry, sad, frightened, depressed confused. Don’t mistake this for poor morale. Rather, these reactions are signs of grieving.
• Give people information—over and over again. Even if all the elements of the coming change(s) aren’t yet decided, keep people informed about where things stand. Open, honest communication shows you respect what people are going through, you realize that you may not yet have all the answers and you can “head off” unhelpful rumors from starting.
• Define what’s over and what isn’t. When things change, there will be uncertainty and confusion. Wherever possible, be clear about which things will change and which won’t.
• Mark the endings. Try to physically demonstrate that a change has been made. Examples could include tearing down or reconfiguring cubicles or offices, piling up old policy and procedures manuals, sweeping them onto the floor and displaying the new manuals. etc.
• Don’t “knock” the old ways. In your enthusiasm about the new way, it may be tempting to ridicule the way we’ve always done things. Remember that people are used to operating the old way (in fact you introduced them to the old ways way back when), and they served the company well for a time.
• Let people take part of the old ways with them. This may take various forms. For example, is there something physical about the old that people could keep (e.g. stuff with the old logo)? One company asked employees to bring in pictures of or asked them to write about the old plant layout, and then gave everyone a scrapbook containing those items.

Managing the Neutral Zone: A Very Difficult Time

Typically, in this phase, neither the old nor new ways work well, as people struggle to let go of the old and adapt to the new. It is a time of uncertainty, conflict and many other emotions. If it only lasted a short time, you could just “ride it out.” But, if the changes are deep and far-reaching, it can stretch out for months. Someone described it as “a time when you’ve let go of one trapeze with faith that the new trapeze is on its way. In the meantime, there’s nothing to hold on to.” Productivity will likely decline during time in the neutral zone.

• Acknowledge and expect anxiety. Anxiety rises and motivation falls as people try to cope with the changes. People may feel overwhelmed or overloaded, as systems are in flux, and therefore, often unreliable.
• Identify and trainfor neededcompetencies. Initially, the skills or abilities people develop will only be of the “book learning” type, it will help familiarize them with the new behaviors involved, and give them a “model” of what will be expected of them.
• Encourage creativity and exploration. Since things are changing anyway, there are opportunities to “fix” other things at the same time. People can feel better about changes if they can be involved in shaping how they will be integrated into other operating systems.
• “Normalize” the Neutral Zone. As I’ve suggested, moving from the old to the new doesn’t occur in a straight line. Even though the changes are explained logically and in detail, there is bound to be confusion, ambiguity and a degree of chaos. You should expect this and make it clear that “it’s OK. We’ll get through this.”
• Strengthen intra-group connections. This will help people realize that we’re all in this together; we all feel uncomfortable and uncertain. Examples could include weekly lunches provided by the company or units involved in the change; creating a “transition newsletter,” which the company can use to communicate progress, print and answer employee questions, correct rumors, etc.
• Create temporary systems. Examples could include creating transitional titles or roles, creating task teams to clarify change directives and/or surface remaining confusing elements, creating short-term progress goals (with celebrations for achievement), etc.
• Establish a monitoring team. This should consist of a cross-section of employees formed to track progress. While it may come up with suggestions for improving the change process, its primary purpose is to assure upward communication so that leadership knows how things are going and hears of problems being encountered.

• People need to understand the Four Ps. Even though you’ve already told them, here you need to reiterate the:
  • Purpose of the change. Why is it needed? What is the logic behind it?
  • A Picture of the future state. How will the outcome look and feel?
  • The implementation Plan. What is the step-by-step plan that will give people a clear idea of how they can get where they need to go?
  • What Part will each person play in both the implementation plan and the ultimate outcome? People need a tangible way to contribute and participate.
• Rules to reinforce the new beginning. These are intended to help people leave the disturbing and creative chaos of the neutral zone and refocus their energies in new directions.
  • Be consistent. This means establishing policies and procedures that send a consistent message. It also means everyone “walking the talk;” leaders exemplifying the new ways, rewarding new behaviors, etc.
  • Ensure quick successes. Set short-term change implementation progress goals that the team can easily meet. This will increase confidence in embarking on the new beginning.
  • Symbolize the new identity. Try to find a way to symbolize the new. Examples could include a locomotive model or mug stating “I’m On Board,” creating a new logo for the change, creating a newsletter to report the change progress, or other visible symbol.
  • Celebrate success. Once you feel the majority of the change has been successfully implemented, celebrate it with something that’s fun and a break from routine. Ideas range from a Friday afternoon pizza/beer blast to a weekend with spouses/significant others in the Bahamas. Give people something to take away with them from this celebration, such as a plaque or T-shirt announcing “I Survived the Merger.”
  • Establish progress benchmarks. This will enable people to gauge for themselves how well they are adjusting to the changes and realizing the envisioned benefits.

• Communication. A useful idea is to schedule a series of “town meetings” to include those employees affected by the change. Initially, these could occur weekly, than taper off to monthly or quarterly for a time. The agenda for these meetings would include:
  • Identify and address problem areas or evidence of resistance
  • Confirm the reasons for the change(s)
  • Create or reinforce the future vision that caused you to introduce the change
  • Confirm the process elements and where you are in the implementation plan
  • Identify strengths, weaknesses and remaining challenges
  • Develop action plans and establish accountability to address issues
  • Provide for ongoing monitoring and feedback
• Reinforce change through performance-based rewards. Design incentive systems that will reward people based on results achieved following the changed system(s). Goal setting works best when you involve employees in setting their own performance goals. It encourages people to learn faster and helps focus efforts to achieve those goals, knowing that there will be tangible rewards attached to their success. For more on the value of performance-based incentives, see my article “ Leveraging the Power of Performance-Based Incentives" in the July issue of CBIA’s Business Builder.

Yes, change is inevitable and constant, and implementation is nev er as smooth as we’d like it to be. But understanding “human nature” and taking the time needed to understand and plan for it will enable you to realize the benefits anticipated in introducing changes in the first place.

John Haas is the founder of Management Strategies Group, (www.managementstrategiesgroup.com), a consulting organization which helps owner-managed businesses and non-profit organizations better focus effort toward achieving their vision and potential. John has special expertise in developing and implementing performance-based incentive compensation plans that help focus individual and team efforts to achieve business goals. Reach John at: (239) 498-0440 or at jhaas@managementstrategiesgroup.com.

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